GLOBAL TECHNOLOGY HAS COLLAPSED: ANOTHER STRESS TEST IN AI BULL CITY

Original source:See you on Wall Street

June 23, Seoul, Korea。

AT 2 P.M., THE KOREAN EXCHANGE TRIGGERED A MELTING. AFTER A SHARP DROP OF 8 PER CENT IN THE KOSPI INDEX, THE TRANSACTION WAS SUSPENDED FOR 20 MINUTES AND RESUMED ITS SEARCH, WHICH RESULTED IN A DROP OF 9.99 PER CENT, AS REPORTED AT 8203.84 POINTS。

And several numbers plotted the height of the sale

TRISTAR ELECTRONICS DROPPED BY 12.31 PER CENT AND SK HERCULES BY 12.47 PER CENT. BOTH COMPANIES ALONE CONTRIBUTED ABOUT 71 PER CENT OF THE FALL IN KOSPI THAT DAY. THE LENGTH OF THE DAY FELL BY 3.55 PER CENT, LEAVING 70,000 POINTS. NASDAQ DROPPED 3.01 PER CENT ON 100 FUTURES AND THE PHILADELPHIA SEMICONDUCTOR INDEX FELL BY 7.7 PER CENT. THERE WAS A DROP OF 5 PER CENT IN FRONT OF THE PLATE, 8 PER CENT IN AMERICAN LIGHT TECHNOLOGY AND 7 PER CENT IN AMD, INTEL, APPS, ARM AND ASMEH。

THE COLLAPSE OF THE LEVERAGE ETF IS ALL THE MORE ALARMING: THREE TIMES AS MUCH AS THE KOREAN ETF FELL BY 32 PER CENT A DAY, AND THREE TIMES AS MUCH AS THE SEMICONDUCTOR ETF FELL BY 17 PER CENT。

KOSPI IS THE TOP FIVE IN THE HISTORY OF KOREAN STOCK MARKET. THE LAST SUCH SHARP FALL OCCURRED IN OCTOBER 2008。

BUT 2008 WAS A CLEAR AND DRAMATIC RECESSION. IN 2026, THE GLOBAL ECONOMY WAS GROWING, WITH THE AL REVOLUTION RAGING, AND KOSPI WAS STILL AT THE FOREFRONT OF THE GLOBAL RISE — UNTIL THE COLLAPSE。

So the real question is: what happened, and why。

Trigger point: Triple signal resonance

Looking back at the time line, the direct trigger of the crash was the resonance of three signals within 24 hours。

FIRST LOAD: SK HERCULES SLOWS HBM4 EXPANSION。

EARLY ON 23 JUNE, THE KOREAN MEDIA REPORTED THAT SK HERCULES WAS SLOWING DOWN THE EXPANSION OF HBM4 AND SHIFTING THE FOCUS TO GDRAM. THE HBM (HIGH BANDWIDTH MEMORY) IS THE CORE COMPLEMENT OF THE AI CHIP, WITH SK HERCULES AND SAMSUNG AS THE ONLY SUPPLIERS OF THE WORLD'S PRODUCTION, AND THE MARKET CONSENSUS ON THE SUPPLY AND DEMAND OF HBM4 IS ALMOST ONE-SIDED TOWARDS "SUPPLY AND DEMAND"。

HBM4 IS ONE OF THE MOST IDENTIFIED BOTTLENECKS IN THE GLOBAL AI INFRASTRUCTURE COMPETITION. WHENEVER MARKETS BEGIN TO QUESTION THE SEVERITY OF THIS BOTTLENECK, THE RESULT IS OFTEN A RE-PRICING OF FAITH。

The second most important thing: the profits made in front of the US dollar。

On Wednesday (25 June), American Light Technology will publish a quarterly financial report. As a result of earlier news of U.S.-Anthropic co-operation, US share prices have reached an all-time high of over 300 per cent during the year. According to the Goldman Sachs Trading Department, "investors are expected to be extremely high, which creates conditions for early write-downs prior to financial reporting"。

In a market driven by expectations, pre-fiscal position adjustment is more lethal than the financial itself。

THIRD: KOREAN REGULATION WARNS OF LEVERAGE ETF。

ON 22 JUNE (THE DAY BEFORE THE COLLAPSE), THE DIRECTOR OF THE KOREA FINANCIAL SUPERVISORY AUTHORITY, LEE QINGJIN, MADE A PUBLIC STATEMENT: HE "RETIRED" DID NOT STOP THE SINGLE LEVERAGE ETF FROM TRACKING SAMSUNG ELECTRONICS AND SK HERCULES, CLAIMING THAT IT "DOES LITTLE OTHER THAN ALLOW THE ISSUER TO PROFIT AT THE EXPENSE OF THE DIASPORA."。

This is a time of near cruelty. When regulators publicly acknowledge that there are structural problems in the market, it directly triggers panic。

Amplifier: Three levers in the Korean market

The lethality of the trio-gravity mentioned above is so great that it strikes a market structure that has been sequestered by leverage depths。

THERE ARE THREE AMPLIFIERS RUNNING AT THE SAME TIME。

Amplifier 1: Bulk financing is at an all-time high。

The Korean diaspora has been known for "bold on." But the leverage for this round has reached a level previously unknown. The Korean diaspora balance continued to rise to record levels before the collapse, and Goldman Sachs stated in his analysis after the collapse: "The rise in the Korean stock market is increasingly dependent on the diaspora as a marginal buyer."

In a spiral of increasing leverage, if the marginal buyer turns, it triggers a reverse drop and a push。

AMPLIFIER II: LEVERAGE ETF ALONE EXPANDS TO $30 BILLION。

THIS IS THE MOST UNIQUE ISSUE IN THE KOREAN MARKET. WITH ONLY A SINGLE LEVERAGE OF ETF ASSETS OF ABOUT $9.1 BILLION, CSOP ISSUED TWICE MORE THAN SK HERCULES AND SAMSUNG ETF IN HONG KONG ON A COMBINED SCALE OF ABOUT $21 BILLION — BOTH PLUS MORE THAN $30 BILLION. OF THE COASTAL PRODUCTS, 92 PER CENT WERE HELD IN BULK。

THE SINGLE LEVERAGE OF ETFS HAS A LETHAL STRUCTURAL FEATURE: THEY NEED TO BE REBALANCED DAILY. WHEN PRICES FALL, ETF WILL NEED TO SELL MORE STOCKS TO MAINTAIN LEVERAGE MULTIPLIERS, WHICH CREATE SELF-REINFORCING PRESSURE TO SELL. WHEN REGULATORS SUGGEST THAT SUCH PRODUCTS MAY BE RESTRICTED, THE FIRST PRODUCT TO BE SOLD HAPPENS TO BE THE PRODUCT ITSELF — AND ITS BOTTOM STANDARD。

THE KOREA FINANCIAL SUPERVISORY AUTHORITY ESTIMATES THAT THE TRADE COMMISSION FOR SINGLE-ELEVER PRODUCTS IS BETWEEN $3 BILLION AND $6.4 BILLION. IT WAS CONSIDERING MEASURES SUCH AS RAISING THE LEVEL OF INVESTMENT IN THE DIASPORA, STRENGTHENING THE EDUCATIONAL TESTING OF TRADERS, IMPOSING A CEILING ON THE SIZE OF THE SINGLE ETF, RESTRICTING NEW PRODUCTS AND STRENGTHENING THE MORATORIUM ON PRICE-NET DEVIATIONS。

Whether they land or not, the signals they send are clear enough: the regulators believe that a significant proportion of the increase in this round is out of step with the underlying rational pricing。

Amplifier III: The national annuity accident became the seller。

THE KOREAN NATIONAL ANNUITY (NPS) - KOREA'S LARGEST PENSION FUND - SOLD ABOUT $1 BILLION IN NET SHARES IN KOSPI WITHIN THE FIRST SIX DAYS OF THE CRASH, WITH $1.5 BILLION IN CUMULATIVE NET SALES TO DATE IN JUNE, THE LARGEST NET SALES RECORDED SINCE APRIL 2021。

THE NPS OPERATION WAS ESSENTIALLY REBALANCING: THE PREVIOUS CONTINUOUS INCREASE IN KOSPI HAD PUSHED THE DOMESTIC STOCK POSITION TO OVER 30 PER CENT, EXCEEDING THE CEILING OF ABOUT 28.8 PER CENT。

But the point is that, in a market that has become highly dependent on marginal capital, the NPS, which was the core stable buyer, suddenly turned from Buyer to Seller, which means that no one in the market can " catch" a sale。

In the words of Goldman Sachs analysts, "the so-called theoretical constraints have become an observable flow reality."

Foam debate: When and how deep

AFTER THE CRASH, A DISPUTE OVER THE "AI BUBBLE" NATURALLY SURFACED。

In his client report on the day of the crash, Chris Cha, the senior Korean contact trader in Goldman Sachs, gave a clear characterization - flow failure:" I STILL HAVE A CONSTRUCTIVE VIEW OF THE STORAGE CYCLE AND CONTINUE TO BELIEVE THAT KOSPI IS UNDERESTIMATED. BUT THIS ROUND RISE IS INCREASINGLY DEPENDENT ON TECHNOLOGICALLY SENSITIVE BUYERS, AND IS THEREFORE MORE VULNERABLE TO THE DISRUPTION OF MOBILE MOMENTUM."

In other words, the medium- and long-term logic has not changed, but the short-term market structure is already at a critical point。

Quantified signal from US silver: NASDAQ is approaching the bubble zone。

A few days before the crash, a team of American and silver strategists released a report that their foam risk indicators showed that the NASDAQ 100 index was close to the level of 0.8, which "usually means higher risk at both ends of the short term." The technology and semiconductor units have shown "extreme bubble price trends"。

BUT IT'S ALSO INTERESTING TO SAY, "AI FOAM CAN TAKE YEARS TO FULLY FORM. HISTORY HAS SHOWN THAT THIS INDICATOR HELPS TO PROVIDE AN INDICATION OF A PHASE-BACK RATHER THAN THE END OF THE TREND."

Li Bei's warning: the trigger condition has appeared。

IN A LETTER TO INVESTORS, THE PRIVATE RECRUITER LI BAE ALSO EXPRESSED HIS VIGILANCE OVER THE AI BLOCK. IN HER OPINION, AI "THE TRIGGER FOR THE BURSTING OF FOAM HAS APPEARED"。

Three voices point to three dimensions: Li's saying "now", Goldman Sachs says "do not panic," and Silver says "do it again, but fall first."。

IT IS WORTH NOTING THAT IN A MARKET BOUND BY LEVERAGE ETF, BULK FINANCING, AND THE DEPTH OF DYNAMIC TRADING, A "STAGE CORRECTION" AND A "FOAM BURST" MAY BE DIFFICULT TO DISTINGUISH IN PRICE PERFORMANCE. TEN PER CENT OF THE DAILY DROPS HAVE TRIGGERED THE MELTING. WHAT HAPPENS IF ONE MORE 10%

Mirror: SpaceX is telling the same story

If you move your eyes from Seoul to New York, you'll see a mirror。

SpaceX fell three days after listing — over 16 per cent on 19 June, about 5 per cent on 22 June and continued to fall on 23 June — The market value evaporated in three days was about $600 billion, and the initial opening price fell to $150, or about $147。

Even more interesting is the fact that SpaceX announced its first debt — financing $20 billion for AI infrastructure — at the same time that stock prices fell sharply. Typically, an enterprise is required to pay a debt when it has financial difficulties. But SpaceX is in the opposite position: its AI capital expenditure story requires a constant flow of ammunition, and the decline in stock prices is closing the window for equity financing -- - Debt is the last option for maintaining the narrative。

The resonance between SpaceX and the South Korean semiconductor reveals a problem of commonalities: the capital market narrative of the AI theme is moving from "infinite imagination" to "calculating returns."。

HOW MUCH SLOWER DID HBM4 EXPAND WHEN INVESTORS STARTED ACCOUNTING? HOW MUCH DID THE GPU LEASE PRICE FALL? WHEN WILL AI REVENUES COVER CAPITAL EXPENDITURES? — MARKET PRICING LOGIC HAS CHANGED。

Posterior: Mi-ray trial

After the crash, everyone turned to a date: 25 June。

U.S. financials -- this is the most direct "trial" that the Technological Unit is facing after the crash。

Bloomberg quotes Piperstone strategist Dilin Wu: "This week's financial report is the real test. A strong performance directly guides Samsung and Hercules in a positive direction — a figure that tells you whether the bottom logic of AI hardware transactions is still valid."

There are two logical possibilities:

Scenario one: beauty lights ahead of expectationsI don't know. If Migwang hands over a strong financial report and gives optimistic guidance, the current round of sale may be quickly corrected — leaving the warehouse for uncertainty, which will be replaced by determination of sex。

Scenario two: Not as good as expectedI don't know. If the guidance of beauty is disappointing, the current round of sale will be validated at the basic level — the characterization of liquidity will be reversed and converted to a collapse at the faith level。

IN SCENARIO ONE, THE KOSPI MELTING WILL BE MARKED "A TECHNICAL STEP". IN SCENARIO TWO, IT WILL BE MARKED "THE TURNING POINT OF AI BULL."。

The answer given by the market on Wednesday night will determine the direction of the Asian market on Thursday morning。

Concluding remarks

THE SHARP FALL ON 23 JUNE CAN BE INTERPRETED AT THE TECHNICAL LEVEL AS THE RESULT OF SK HERCULES HBM4'S SINGLE MESSAGE + THE STRUCTURAL VULNERABILITY OF LEVERAGE ETF + THE UNEXPECTED SELLER OF NPS REBALANCING + THE AVOIDANCE OPERATION BEFORE U.S.R.O., THE FOUR-HEAVY FACTOR IS THE RESULT OF RESONANCE WITHIN 24 HOURS。

But this is just a technical interpretation。

THE DEEPER PROBLEM IS THAT, WHEN THE AI BULLS CITY HAS REACHED SUCH A POSITION – VALUATIONS HAVE REACHED HISTORICAL EXTREMES, RISING DRIVERS HAVE SHIFTED FROM INSTITUTIONS TO SCATTERED HOUSEHOLDS, TRADING STRUCTURES HAVE BEEN TIED TO LEVERAGE PRODUCT DEPTHS, WHILE INFLATION AND INTEREST RATE HIKES ARE EXPECTED TO RAISE RISK-FREE INTEREST RATES – A STRUCTURAL BREAK, ALMOST SOONER OR LATER。

KOSPI MELTING IS A MIRROR。

The mirror reflects that when all market participants are leveraging the same narrative, the reverse correction of the narrative — however fast and deep — should not be considered an accident。

For investors, there's only one question left: how big are you going to pull back to answer "continue holding"